NSCAD University, one of Canada's oldest and most revered art schools, faces an uncertain future this week as it struggles to stay afloat financially, having already watched Queen's University suspend enrolments to its fine arts program last month over a lack of resources.

The storied but cash-strapped Nova Scotia College of Art and Design awaits the final draft of a report to government on ways to slash its ongoing deficits. For months, the province has publicly entertained thoughts of merging NSCAD with another university as a way of trimming costs – something the college's community has vehemently opposed.

NSCAD officials and faculty are increasingly optimistic the report, authored by former provincial deputy minister Howard Windsor, will leave the university independent, thanks partly to doubts about whether a merger would actually save money. But with no new funding expected, there are hard choices ahead about how to cut spending without harming the quality of the costly studio-based education that has groomed such nationally renowned graduates as conceptual sculptor Micah Lexier and multimedia artist Kelly Mark. Sarah McLachlan attended for a time, and Joseph Beuys, Michael Snow and Joyce Wieland have lectured there.

The NSCAD community has rallied to argue that its freedom is central to nurturing its smart, spirited culture of experimentation – the “mix of head, hands and heart” that has defined it, says Karin Cope, an associate professor who has helped spearhead the response.

“Anything that compromises the integrity of [NSCAD’s]independence undermines what it is,” said Michael Donovan, chair of NSCAD’s board of governors, which gave its input on a draft of the report at a closed-door meeting last week. “So the board’s position has been, consistently, that [a merger]is not something that makes any sense, and not something the board is prepared to contemplate.”

Last year, the province commissioned economist Tim O’Neill
to look into the fiscal health of Nova Scotia’s universities. Dr. O’Neill recommended in his fall report that the government consider merger options for NSCAD. The university has been running escalating deficits – $1.4-million last year and $2.4-million this year – and the provincial government is loath to keep covering them.

The university’s board took the O’Neill report seriously, Mr. Donovan said, but saw the NSCAD recommendation as a “footnote” and chose not to respond.

The province was eager for action. In September, it tasked Mr. Windsor with studying NSCAD’s options, including the merits of possible mergers. That idea had arisen before, but this time the government seemed serious.

An ad hoc group of some 2,600 students, faculty, staff, alumni and community members coalesced, calling itself Friends of NSCAD, and gathered nearly 8,000 signatures on a petition demanding that the school stay independent.

When Queen’s University suspended enrolments to its Bachelor of Fine Arts program last month, citing a lack of resources, it only bolstered the group’s resolve.

The 124-year-old NSCAD’s financial woes stem partly from more than $17-million in debt it carries, most of it from the underfunded addition of the new 70,000-square-feet Port Campus on Halifax’s south shoreline in 2007. Paying it down is a priority, but the board also knows it will have to sacrifice some spending: The province reduced grants to universities by 4 per cent this year, and NSCAD is hardly a fundraising powerhouse.

“We’re in an environment where the government simply has less,” Mr. Donovan said, promising a plan to balance the books “early in the new year.”

The government has been tight-lipped about its plans, but Mr. Windsor’s report is expected to be made public this week. NSCAD hopes it will be a road map to a standalone solution, but either way members of the university expect to take some lumps in the drive to sustainability.